Rethinking the ATM Channel: Cost Center or Strategic Asset?

Not long ago, the prevailing mindset in banking was to spend as little as possible on ATMs. They were seen as just another cost of doing business - something to be minimized. When I first moved into the ATM channel 21 years ago, I was often asked why I'd want to get involved with ATMs. "Cash is going away," people said.

But those of us in the industry knew better.

While cash itself hasn't disappeared, the role of ATMs as simple cash dispensers has been fading for years. ATMs have been evolving, and that evolution continues today. Even retailers who operate ATMs are upgrading their machines with cash recycling capabilities, using them to deposit store cash instead of making risky bank runs or keeping excess money in registers and back-office safes.

ATMs are no longer just a convenience - they're becoming an integral part of branch strategy

The Challenge for Financial Institutions

This shift presents both opportunities and challenges, especially for smaller financial institutions. To keep up with evolving technology and customer/member expectations, they must continue investing in their ATM and ITM channels. The key question is: How do you keep up with innovation while ensuring basic reliability your customers expect?

Because no matter how modern your ATM is, if a customer pulls up to an Out of Service screen, nothing else matters.

Institutions must now ask themselves critical questions about their ATM and ITM strategies:

• Do we need ATMs or ITMs?

• If we go ITM, should we choose core-integrated or dual-entry? (Manufacturers will always push core integration, but dual-entry adds only about 18 seconds to a transaction. Is the cost difference justified?)

• Are we doing enough to protect our ATMs-both physically and logically?

• Should we consider ATM-as-a-Service (ATMaaS)? If not, what balance of in-house management versus vendor support makes sense?

Why Are You Using ATMs?

Financial institutions typically maintain ATMs for a few key reasons:

✔️ Cost Efficiency – ATMs provide a lower-cost channel for customers and members to perform routine transactions, reducing teller line traffic while offering 24/7 access to funds.

✔️ Branding & Customer Access – Offsite ATMs can increase brand visibility, but they come at a cost. Before installing one, ask yourself: Is this ATM a brand play, or do I expect it to be profitable? If it’s for branding, is the expense worth it, or are there more cost-effective ways to expand your reach?

Maximizing Your ATM Investment

Understanding your institution's long-term strategy is key to making informed ATM and ITM investment decisions. Yet, many banks and credit unions struggle to quantify a crucial metric: cost per transactions.

At BCOS, we help financial institutions gain clarity on their ATM and ITM operations. Using our decades of industry experience and proprietary customer behavior algorithms, we ensure your ATM channel is not just a cost of doing business-but a strategic self-service channel that enhances your brand.

Let's move beyond the outdated mindset of ATMs as a necessary expense. It's time to optimize, innovate, and make your ATM fleet work smarter for you.

Want to see how? Email us at info@branchcos.com to learn more.